What do people actually know about personal finance?
Not much, it seems...

Wednesday, April 4, 2012

An extraordinary week

How extraordinary last week was! On Tuesday and Thursday, I sat in a classroom on the sixth floor of Duques Hall, here at the George Washington University School of Business, to listen to Fed Chairman Ben Bernanke explain the recent financial crisis, the Fed’s response to it, and the lessons we can take from it.

While there were only 30 (very attentive and somewhat anxious) undergraduate students in the classroom and a handful of professors whose lectures in this course will follow Chairman Bernanke’s four initial classes (no pressure …), the classes were live streamed and are now archived online at http://www.federalreserve.gov/newsevents/lectures/about.htm

This was the first time that the Chairman of the Fed has given a set of lectures on the Fed, why it was founded, what its functions are, what it has done historically, and what it did during the financial crisis. This is truly extraordinary and part of the new era of Chairman Bernanke’s leadership, which is bringing transparency and accountability to an institution that has inspired books with titles like “Secrets of the Temple: How the Federal Reserve Runs the Country.” But what was more extraordinary was to listen to the leader of this institution, who more than anyone has done so much to turn the economy away from the brink of collapse, speak with such rigor, depth, and also humility. As he stated in his classes, because of what we do not know, we have to be humble.

I recognized in Chairman Bernanke the brilliant professor from Princeton, who finished his slide presentations right at the minute he was supposed to end, whose historical perspective was so deep and impressive that the students gave him, at the end of his set of lectures, a framed page of the 1933 issue of the New York Times as a gift. The front page of that issue announced that the United States was abandoning the gold exchange standard, a topic Chairman Bernanke covered in class in fascinating detail. But he also brought to the classroom the mastery (and agony) of leading a very powerful institution at a time when problems are not only domestic but also global.

And what a difference it made to be able to see him reflect on the lecture notes that were projected on the screen, walk around the classroom, call the students by name, and stay a few minutes overtime to answer questions. At the end of his last lecture he took a group photo with both the students and the faculty. It was extraordinary!

As if this wasn’t enough for one week, on Friday I got to go to the Clinton Global Initiative University here at the Smith Center to listen to former President Clinton speak. He launched the Clinton Global Initiative University (CGI U) in 2007 to engage the next generation of leaders on college campuses around the world. As described on their website, each year, CGI U hosts a meeting at which students, national youth organizations, topic experts, and celebrities discuss solutions to pressing global issues.

As many as 1,200 attendees came to GW, and at Friday’s opening session President Clinton spoke with an infective passion about this initiative. On stage with him was Madeleine Albright, who spoke of her experience as Secretary of State and her fight to protect human rights; Ray Barcott, a former marine with an MBA from Harvard Business School who described how he founded Carolina for Kibera, an organization aimed at breaking cycles of violence in and developing leaders from the Kibera slum of Nairobi, Kenya; Sadiga Basili Saleem, who founded and directs schools for girls in Afghanistan; the President of George Washington University, who spoke of the GW Center for Civic Engagement and Public Service and his involvement and promotion of the Center. And also on stage was Usher, yes, Usher, who spoke of his foundation and the work they do. Written questions were submitted to the panelists, and a student asked Usher about his inspiration, noting that “singing the answer is encouraged.” Usher reply by singing Whitney Houston’s “Greatest Love of All.” It was extraordinary!

And so I spent my week listening to the wisdom all of these amazing people, taking from each of them some lessons I hope to apply to my work on financial literacy.

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About Me

Annamaria Lusardi is the Denit Trust Distinguished Scholar and Professor of Economics and Accountancy at the George Washington School of Business. Previously, she was the Joel Z. and Susan Hyatt Professor of Economics at Dartmouth College. She has taught at Dartmouth College, Princeton University, the University of Chicago Public Policy School, the University of Chicago Booth School of Business and the Graduate School of Business at Columbia University. From January to June 2008, she was a visiting scholar at Harvard Business School. She has advised the U.S. Treasury, the U.S. Social Security Administration, the Dutch Central Bank, and the Dartmouth Hitchcock Medical Center on issues related to financial literacy and saving. She is the recipient of the Fidelity Pyramid Prize, awarded to authors of published applied research that best helps address the goal of improving lifelong financial well-being for Americans. She holds a Ph.D. degree in Economics from Princeton University.